Mexican border cities in limbo as tariff threats spark recession fears

CIUDAD JUÁREZ

Employees work at a textile factory in Tlaxcala, Mexico

As soon as the sun glints over miles of border fence dividing the United States and Mexico, the engines of cargo trucks packed with auto and computer parts roar to life along border bridges and bleary-eyed workers file into factories to assemble a multitude of products geared toward the U.S. market.

For more than half a century, this daily rhythm has helped fuel the heartbeat of a transnational machine that generated more than $800 billion in trade between the U.S. and Mexico in 2024 alone.

Over the past year, however, President Donald Trump's threatened 25 percent tariffs against Mexico and Canada have plunged manufacturing hubs all along the northern Mexican border into limbo, a state that persists despite a one-month reprieve to which Trump agreed on Feb. 3

Tariffs would cripple Mexican border economies that are reliant on factories churning out products for the U.S. — auto parts, medical supplies, computer components, myriad electronics — and likely thrust the country into a recession, economic forecasters have warned.

Some workers wonder how much longer they'll have jobs, while business leaders say the uncertainty has already led many investors to start tightening their purse strings.

“It’s a conflict between governments and we’re the ones most affected,” said 58-year-old truck driver Carlos Ponce, leaning against his rig at the customs border crossing between Ciudad Juárez and El Paso, Texas. “Tomorrow, who knows what will happen?”

Manufacturing in export-oriented assembly plants known as maquiladoras are the heart of Ciudad Juárez's economy, with 97 percent of its goods going to the U.S., according to figures from Mexico's Economic Ministry.

The factories were born in the 1960s in an attempt to boost economic development in northern Mexico and lower prices for U.S. consumers. 

This week, workers and business leaders alike breathed a sigh of relief when Mexican President Claudia Sheinbaum announced she had negotiated with Trump to delay tariffs one month.

Manuel Sotelo, a leader of Mexico’s National Chamber of Freight Transportation who owns a fleet of trucks that cross the border every day, sees the tariff threats as more of a political power move than a future economic reality.

"Both countries would be paralyzed," said Sotelo. “Let's say he did slap a 25 percent tariff [on Mexico], what would they do during the Super Bowl without avocados ?”

On the other hand, Sotelo acknowledges that the tariff talk has already inflicted some damage. He and other business leaders say that over the past year they've watched investment dip in Ciudad Juárez because of political uncertainty, as investors hesitate to funnel their money into businesses that could collapse with the stroke of a pen in Washington